Let's be real here. College can be expensive for many students. Very expensive. This is why it is so important to do everything in your power to get the most money possible from FAFSA. FAFSA, otherwise known as the Free Application for Federal Student Aid, gives students money based on multiple factors such as household income, filing date, grades and scores, and many more. All I know is that it can be really hard to get any money if your household income is over even $150k. I know this because this was me. In this article, I am going to be sharing tips and tricks that you can implement in order to get the most out of FAFSA.
FAFSA believes that kids should be able to spend 20% of their assets on college costs. For adults, this rate is just a little above five percent t 5.64%. If you know anything about rates, you know that is dramatically lower! By movings some of their money into your account, you can possibly help them get a little more aid. If your kid isn't at the college stage yet and is still fairly young, suggest saving up money in your accounts. In the end, you have to make it appear that your kid doesn't have that much money set aside when he really does.
As the old saying goes "the early birds get the worm". This is the same for the FAFSA. When you file early, the government has more funds that after everyone files. This gives you a higher chance of getting more money than you normally would for college. I would recommend filing as early as January of senior year. Some states like Illinois, Kentucky, and a few others operate on this first come, first serve bias. In the end, this can help you get a couple extra dollars. I would also recommend filing your taxes before you fill out the FAFSA for this will give you a reference point and really make things easier. If you don't want to, you can always use the previous year's tax return.
When filling out the FAFSA form, make sure that you are going through is carefully and thoroughly. You really don't want to risk making a mistake as this may cost you money. Try not to leave certain fields blank and check it multiple times. This ensures you that you will get the most out of it.
Like I said earlier, FAFSA is based on your current assets. If you have a large sum of money sitting in a bank account, you may want to think about getting rid of it. In fact, this can become a win-win situation for you are your kid. You can pay off debt, buy a house, or just find a way to get rid of that money the smart way. These types of activities will lower your asset base, showing FAFSA that you have less to pay for college.
Aside from spending a large sum of your savings, you can transfer the money to your retirement accounts. However, investments that are capital gains are treated as income. When you invest in your retirement accounts, that money is safe and doesn't apply to FAFSA. These retirement accounts can be both IRAs and 401ks. Doing this while your child is in high school can lower the asset base dramatically. Not only are your helping your future but you are also helping your child's future.
When filling out the FAFSA form, you always want to play by the rules. Lying about your income and assets is a crime and is punishable by up to a $20,000 fine. Some financial aid packages can also be forfeited and you could possibly be sentenced to some prison time. I guess what I am trying to say in a long-winded way is be honest. Because many schools have partnered together in a way, it makes it a lot easier to spot fraudulent activity. In other words, some applications won't have the same information on them as others. However, the good news is that you can still lower your asset base so that you can receive more aid money. In the end, you know what is right and what is wrong.
Every year, thousands of scholarships go untouched that could be yours. Some of these scholarships are based on your grades, community service, affiliations, and many other things. I missed out this past year on a scholarship that was worth $500. I could have easily used that money to pay down one of my classes. In the end, there are many sites that you can find these scholarships. Some of them are very easy to fill out and others require a little bit more work. In the end, you could be getting hundreds or maybe even thousands of dollars in aid with just a few hours of work here and there. If you ask me, it is well worth it.
All in all, college is very important to many young individuals. It ultimately helps them grow and develop as young adults. Don't let financial reasons stop you from setting academic goals and achieving them. I hope this article helps you with your FAFSA.